Republicans warn bank CEOs to steer clear of social and cultural issues

Senator Pat Toomey speaks at the Dirksen Senate Office Building in Washington, DC, USA, May 10, 2022. Tom Williams / Pool via REUTERS / file Photo / file Photo

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WASHINGTON, Sept. 22 (Reuters) – On Thursday, the heads of the nation’s largest banks faced stinging criticism from Republicans who complained that companies are taking liberal positions inappropriately on social and cultural issues.

Senator Pat Toomey, the senior Republican on the Senate Banking Committee, urged banks to stop “embracing a liberal ESG agenda that harms America” ​​as CEOs appeared before Congress for a surveillance hearing. . Toomey, often a banking ally who has opposed tougher industry rules, said companies are out of bounds when dealing with non-banking issues like weapons and abortion.

“I can’t help but observe that when banks weigh heavily on social and political issues, they always seem to take the liberal side,” he said in his opening statement.

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Increased scrutiny underscores the challenges that the country’s largest lenders face increasingly as they seek to balance business interests with the pressure of policy makers, activists and investors to take a stand on environmental, social and governance (ESG) issues .

Several Republicans have said their banks are giving in to liberal pressure to take action on these issues and have suggested that the Conservatives will be ready to counterbalance their pushback. sen. Kevin Cramer said banks felt pressured to be “one of the great people”.

Cramer, a Republican from North Dakota, persuaded CEOs to promise that a recently approved trade code to record gun shop transactions would not be used to restrict firearms purchases. Read more

“We do not intend to use the code to limit or restrict the purchase of firearms,” ​​said Jane Fraser, CEO of Citigroup, who added, “We respect the second amendment.”

The lineup included CEOs of the four largest U.S. banks: Jamie Dimon of JPMorgan Chase & Co’s (JPM.N), Charles Scharf of Wells Fargo (WFC.N), Brian Moynihan of Bank of America (BAC.N) and Fraser of Citi. They were joined by CEOs of the country’s largest regional lenders, US Bancorp (USB.N), PNC Financial (PNC.N) and Truist (TFC.N).

CRITICISM ZELLE

For their part, the Democrats have continued their critical stance of big banks, arguing that they are enjoying large profits while mistreating consumers and workers. None of the CEOs present agreed in the affirmative with President Sherrod Brown’s request to remain neutral in any employee union effort.

sen. Elizabeth Warren blew up banks for what she claimed were unacceptable levels of fraud on Zelle, the digital payment tool owned by many of the largest banks. She criticized the companies for failing to provide complete data on the level of Zelle fraud seen in each bank, with several CEOs promising to provide the information by the end of the day. Warren sent out a letter looking for this information in July.

“You tell people it’s safe, but when someone gets scammed, you say it’s the customer’s problem,” he said.

Brown told reporters after the hearing that the Democrats “will stay on top of them” until full data on the fraud is provided.

PNC CEO William Demchek said banks are busy solving any issues with Zelle, but urged policy makers to look into other peer-to-peer payment programs, which he says have much higher levels of fraud.

“We will fix Zelle,” he said.

The CEOs said their banks cover all unauthorized transactions, but they don’t pledge to refund all customer fraud claims.

The CEOs were in Washington for a second day of surveillance hearings. On Wednesday, executives were urged by lawmakers to take a tougher stance on doing business with China amid mounting tensions between Washington and Beijing over Taiwan’s sovereignty and China’s human rights. Read more

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Recommendations by Pete Schroeder, Lananh Nguyen and Saeed Azhar; additional reportage by Hannah Lang Editing by Nick Zieminski

Our Standards: Thomson Reuters Trust Principles.

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